We developed a strategy to formulate supraparamagnetic iron oxides (SPIOs) in nanoparticles (NPs) of biodegradable copolymer made up of poly(lactic acid) (PLA) and d-alpha-tocopherol polyethylene glycol 1000 succinate (TPGS) for medical imaging by magnetic resonance imaging (MRI) of high contrast and low side effects. The IOs-loaded PLA-TPGS NPs (IOs-PNPs) were prepared by the single emulsion method and the nanoprecipitation method. Effects of the process parameters such as the emulsifier concentration, IOs loading in the nanoparticles, and the solvent to non-solvent ratio on the IOs distribution within the polymeric matrix were investigated and the formulation was then optimized. The transmission electron microscopy (TEM) showed direct visual evidence for the well dispersed distribution of the IOs within the NPs. We further investigated the biocompatibility and cellular uptake of the IOs-PNPs in vitro with MCF-7 breast cancer cells and NIH-3T3 mouse fibroblast in close comparison with the commercial IOs imaging agent Resovist. MRI imaging was further carried out to investigate the biodistribution of the IOs formulated in the IOs-PNPs, especially in the liver to understand the liver clearance process, which was also made in close comparison with Resovist. We found that the PLA-TPGS NPs formulation at the clinically approved dose of 0.8 mg Fe/kg could be cleared within 24 h in comparison with several weeks for Resovist. Xenograft tumor model MRI confirmed the advantages of the IOs-PNPs formulation versus Resovist through the enhanced permeation and retention (EPR) effect of the tumor vasculature.